MADO Enterprises LTD

Executive Summary

MADO Enterprises’ business idea is “law price – high quality” product, which uses business to consumer (B2C) methodology. They usually sell easy cook food, basic electronics, fashionable shoes, and clothing. The company possesses both risks on the competitive market and strengths being affordable to lower and middle class representatives and having special membership prices for VIP customers. MADO’s departments consist of Marketing, HR, Finance and Customer Service, and the company’s on- and off-job trainings motivates the employees come back and apply gained knowledge with the aim of MADO’s business to improvement. Argos, IKEA, Tesco, Sainsbury’s, Marks &Spencer, Waitrose, Primark, Curry’s PC World, etc. is the potential market of MADO Enterprises. Having their products in aforementioned stores brings the risks connected to the high popularity of competitors and capital; this results in insufficient number of their customers. Thus, the present brand loyalty has negative impact on the MADO’s revenues, although their total assets are about 26% higher compared to total liabilities. The main strength of the company is that they offer great variety of products, which are low in price, but high in quality. 7P’s + Packaging is the Marketing mix for MADO, which consists of product, price, promotion, place, people, process, and physical evidence. Price penetration, going-rate pricing and price skimming (creaming) characterize MADO Enterprises. MADO Enterprises are associated with both “above-the-line” (ATL) and “below-the-line” (BTL) advertising techniques and strategy to sell their services and products. The sources of Finance at MADO are internal, which helps to utilize working capital more effectively. MADO is planning to adopt “just-in-time” (JIT) instead of “just-in-case” (JIC) stock control and unused stock is to be turned into cashable cash. 

Aims and Objectives of the Business

MADO Enterprises are private companies the main business idea of which is “law price – high quality” product, which uses business to consumer (B2C) methodology.  Their services are characterized by unique selling point: purchase on credit for a number of days available, and they created special membership prices for VIP customers.

It is a private limited company because limited liability encourages investment; it is easy for them to deal with other companies. Moreover, this type of business can survive the death of a shareholder and the four divide 70% of the shares equally.

In order to be successful, taking into the consideration the operations in particular company, for example, MADO aims to hire around 400 employees paying the salary higher than minimum wage in the UK by GBP 5.00 per hour excluding raise. They plan to adopt an exclusive recruitment method through upon successful completion of job applications; scouts will also have special hiring procedures. MADO’s departments consist of Marketing, HR, Finance and Customer Service.

The company provides on-the job and off-the job training for both gaining experience on site and the opportunity to learn new skills. Gained knowledge off-the job aims at bringing the employees back and apply it with the aim of MADO’s business to improvement. There are fringe benefits to all employees based on intrinsic and extrinsic motivation methodology. For example, if the employee’s performance increases, he or she is given a raise.

Business Environment

The potential market of MADO Enterprises is Argos, IKEA, Tesco, Sainsbury’s, Marks &Spencer, Waitrose, Primark, Curry’s PC World, etc. However, having their products in those stores bring certain risks connected to the high popularity of competitors, their capital is getting lower, thus, the number of their customers is still not enough. In this case, we mean brand loyalty, which is the process, where a customer prefers to purchase the products repeatedly from the same manufacturer and rather than from other suppliers. That is one of the reasons why the payments are not conducted on time and there is not enough cash for further purchases.

Despite the aforementioned risks, this type of company possesses some strength as well. It is a unique selling point because of the possibility of usage coupons; they offer great variety of products, which are low in price, but high in quality.

Their potential customers are males and females of all ages and social classes, starting from the poorest in society, working class and skilled working class representatives and going up to lower middle class, middle class and finishing with the upper middle class customers.

The Product/Service description

The companies like MADO Enterprises usually sell easy cook food, basic electronics, fashionable shoes, and clothing (Grishyna 2012, OXL 2008, Photoshop 2010).  As for their location, shops are usually easy and fast to access. Factory and warehouses are aimed to be located in the outer boroughs (i.e. in London area it is in Chelsea). Their products are available for purchasing both online and at stores. Besides, there is possibility for doorstep delivery, which is free of charge if, for example, the customer takes above GBP 8.00 per order.

In the terms of hygiene, packaging, and appearance,which has a huge impact on consumers buying decision the quality of the product they sell, affects the whole thing. In order to satisfy the consumer and to ensure the best service delivery of the items, MADO use special methods, which makes the shopping experience pleasant and provokes positive consumers’ judgment towards the company and organization of the purchasing itself.  

Marketing Area

The Marketing mix for MADO consists of the 7P’s + Packaging, which are as follows: product, price, promotion, place, people, process, and physical evidence. MADO Enterprises are characterized by the following market-based pricing:

1)     Price Penetration, which is the technique of attracting new customers by setting a relatively low entry price initially compared to the eventual market price;

2)    Going-Rate Pricing, which is a process of setting a price for a service or product using the prevailing market price as a basis. Usually it is a very common practice with homogeneous products where a very little variation from one producer to another is present;

3)     Price Skimming (Creaming), which is a pricing strategy where a marketer sets a comparatively high product or service price at the beginning and then lowers it later.

As for the promotion area, MADO Enterprises are associated with both “above-the-line” (ATL) and “below-the-line” (BTL) advertising techniques and strategy to sell their services and products. ATL are mostly on-line advertisement, TV commercials, radio and newspaper adds. BTL are fliers, door-to-door advertisement and public surveys.

Financial Area

The sources of Finance at MADO are internal, which helps to utilize working capital more effectively. There is also a trade credit with suppliers, which means that instead of paying on the spot, MADO allow doing after 60 days of purchase. Orientation on retained profit means that MADO use profit as a source of finance instead of dividends. MADO are planning to adopt “just-in-time” (JIT) instead of “just-in-case” (JIC) stock control. Unused stock is to be turned into cashable cash. 

Taking into the consideration MADO Enterprises LTD in financial terms, the company’s cash flow constitutes about $6,7577.1 (Appendix).  As we see, total assets are $119,087.30 whereas about 50% are Total Current Assets. There are no Net Fixed Assets. Total Liabilities constitute $87,924.10, which is 26% lower than total assets.

Conclusion

MADO Enterprises are unique selling pints, which purchase on credit for a number of days available with a special membership prices for VIP customers whose total assets are about 26% higher compared to total liabilities. Despite the company has some risks connected with the high competition and brand loyalty issues, MADO have much strength due to its orientation on the classes of the society that constitute a majority. Using both ATL and BTL advertising techniques and strategy to sell their services and products, the company benefits a lot by attracting more customers and is generally being more successful on the market arena.

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